CDW (CDW) official guidance

We now expect full year non-GAAP net income per diluted share growth to be at the high end of high single digit range year-over-year, reflecting our expected gross profit performance, increasing operating leverage from our Geared for Growth initiatives, and disciplined execution of our operational and capital allocation priorities.

Finally, we expect third quarter non-GAAP net income per diluted share to also be at the high end of high-single-digit growth year-over-year.

This means full year 2026 gross margin would be modestly below the full year 2025, although well above the levels from three-plus years ago.

Based on the anticipated mix of products and end markets, we expect second half gross margins to be below second half 2025 levels.

Factoring in these variables, we are raising our full year outlook and expect gross profit to grow mid-single digits for the full year 2026.

Moving to modeling thoughts for the third quarter, we anticipate gross profit to increase at a mid-single-digit year-over-year growth rate.

Moving down the P&L, we expect third quarter non-GAAP SG&A to be lower than the second quarter, driven by our Geared for Growth program benefits.

This will result in non-GAAP operating expense as a percentage of gross profit that is down both year-over-year and quarter-over-quarter.

Operating excellence and expense discipline remain priorities, and we expect continued improvement in our operating leverage as we move throughout the year.

We now expect the U.S. IT addressable market to grow in the mid-single digits in 2026 on a customer spend basis, with 200 to 300 basis points of CDW outperformance.

We now expect the U.S. IT addressable market to grow in the mid-single digits in 2026 on a customer spend basis, with 200 to 300 basis points of CDW outperformance.

Finally, we expect second quarter non-GAAP net income per diluted share to be up high single digits year-over-year.

We continue to expect the second half gross profit contribution to be slightly above the first half, with slightly more weight to the first half than we historically experienced, driven by customer urgency we've discussed.

Moving to modeling thoughts for the second quarter, we anticipate gross profit to grow at a high single-digit rate sequentially, leading to mid-single-digit year-over-year growth.

Moving down the P&L, we expect second quarter non-GAAP SG&A to be modestly higher than the first quarter, resulting in a operating expense as a percentage of gross profit that is seasonally lower than the first quarter level and similar to the prior year's second quarter.

If you scroll that forward, Adam, to 2027, you should think of that $100 million estimate that we gave as a gross annual run rate impact.

The $200 million would be what we see in the way of line of sight if we go further out a year or so and into 2028.

Moving down the P&L, we expect second quarter non-GAAP SG&A to be modestly higher than the first quarter, resulting in a operating expense as a percentage of gross profit that is seasonally lower than the first quarter level and similar to the prior year's second quarter.

Finally, we expect the first quarter Non-GAAP net income per diluted share to be up mid-single digits year-over-year.

For 2026, we are maintaining our target to return 50%-75% of adjusted free cash flow to shareholders via the dividend and share repurchases.